Opinion
No. CV 05-4008138
March 29, 2007
MEMORANDUM OF DECISION
Before the court is Defendant Assurance Co. of America's Motion for Summary Judgment on the ground that there are no issues of material fact and the defendant is entitled to judgment as a matter of law.
This action to recover under an insurance policy issued by the defendant, Assurance Corporation of America, arises out of a contract for building restoration between the plaintiff, the Candid Corporation, and the defendant's insured, Connecticut Building Restorations, LLC (Connecticut Building). On June 6, 2001, the plaintiff commenced an action against Connecticut Building, alleging negligence in the performance of the contract resulting in damages to the specialty windowpanes of the subject building. On December 21, 2004, the plaintiff obtained a judgment against Connecticut Building in that case, Candid Corporation v. Connecticut Building Restoration, Docket No. CV 01 0451970. On March 4, 2005, the plaintiff filed a complaint seeking to recover from the defendant pursuant to General Statutes § 38a-321.
Section 38a-321 provides in relevant part: "Each insurance company which issues a policy to any person, firm or corporation, insuring against . . . damage to the property of any person, for which loss or damage such person, firm or corporation is legally responsible, shall, whenever a loss occurs under such policy, become absolutely liable . . . Upon the recovery of a final judgment against any person, firm or corporation by any person, including administrators or executors, for loss or damage on account of bodily injury or death or damage to property, if the defendant in such action was insured against such loss or damage at the time when the right of action arose and if such judgment is not satisfied within thirty days after the date when it was rendered, such judgment creditor shall be subrogated to all the rights of the defendant and shall have a right of action against the insurer to the same extent that the defendant in such action could have enforced his claim against such insurer had such defendant paid such judgment."
The plaintiff alleges the following facts. On October 6, 1999, the plaintiff contracted with Connecticut Building to have certain seams in the steel structure of its building at 116 Washington Avenue in North Haven caulked, cleaned and restored. While performing the specified work, Connecticut Building damaged the building's specialty windowpanes, which were not mentioned in the contract. Connecticut Building allowed paint to collect on these windowpanes, and further damaged them by improperly cleaning off the paint. At the time of the performance of the contract, Connecticut Building had in effect an insurance policy with the defendant under which the defendant would be obligated to pay all sums for which Connecticut Building became liable because of bodily injury or property damage within the scope of the policy. There is an exclusion in the policy, however, for "`property damage' to . . . (6) that particular part of any property that must be restored, repaired or replaced because `your work' was incorrectly performed on it" (the "your work" exclusion).
"Your work" is defined as "(a) work or operations performed by you and (b) Materials, parts or equipment furnished in connection with such work or operations."
On October 26, 2006, the defendant filed a motion for summary judgment based on the applicability of the "your work" exclusion. It filed a memorandum of law and various exhibits in support. On December 7, 2006, the plaintiff filed a memorandum in opposition to the motion.
The defendant asserted numerous special defenses based on other policy provisions in its answer; however, the "your work" exclusion is the sole basis for the present motion.
A certificate of closed pleadings and jury claim were filed by the plaintiff on June 10, 2005, and jury selection was set for February 6, 2007. Pursuant to Practice Book § 10-44, the defendant filed a motion for permission to file a motion for summary judgment on October 26, 2006, which the court, Holzberg, J., granted on November 14, 2006.
"Practice Book § 17-49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." (Internal quotation marks omitted.) Old Farms Associates v. Commissioner of Revenue Services, 279 Conn. 465, 479, 903 A.2d 152 (2006). "In ruling on a motion for summary judgment, the court's function is not to decide issues of material fact, but rather to determine whether any such issues exist." Nolan v. Borkowski, 206 Conn. 495, 500, 538 A.2d 1031 (1988). "In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact . . . The courts hold the movant to a strict standard. To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact . . . As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent . . ." (Internal quotation marks omitted.) Zielinski v. Kotsoris, 279 Conn. 312, 318-19, 901 A.2d 1207 (2006).
The defendant moves for summary judgment on the ground that the damages caused by Connecticut Building fall under the "your work" exclusion and, therefore, are not covered under the policy. Since the plaintiff's rights arise by subrogation, the defendant argues, the plaintiff is subject to any defenses the defendant might have against its insured; therefore, it is not legally liable to the plaintiff for the damages suffered at the hands of Connecticut Building. The defendant contends that the "your work" exclusion standard in most commercial general liability policies is unambiguous, and although it has not yet been interpreted in Connecticut, other jurisdictions have found it to preclude coverage in circumstances similar to the present case. The defendant further invokes the "well-established policy" that insurers are not to serve as guarantors for the workmanship of an insured. The damage to the plaintiff's windows, the defendant argues, was the result of faulty workmanship, and is not the sort of risk contemplated by commercial general liability policies.
The plaintiff counters that the "your work" exclusion is ambiguous and should be construed against the insurer since the phrases "that particular part of any property" and "incorrectly performed" are not defined and are open to multiple interpretations. Furthermore, the plaintiff argues Connecticut Building's conduct in damaging the windows falls outside the "your work" exclusion: the contract was for restoration and cleaning of the steel structure of the building, and the windows are not mentioned. Additionally, the plaintiff contends that there exist genuine issues of material fact regarding the applicability of the "your work" exclusion; specifically, whether the damage to the windows was "incidental to" the contract and whether the damage was caused during the work on the steel portions of the building pursuant to the contract, or afterwards when paint splattered on the windows was being cleaned off.
The threshold determination is whether the "your work" exclusion at issue is ambiguous. "A contract is unambiguous when its language is clear and conveys a definite and precise intent . . . The court will not torture words to impart ambiguity where ordinary meaning leaves no room for ambiguity . . . Moreover, the mere fact that the parties advance different interpretations of the language in question does not necessitate a conclusion that the language is ambiguous . . . In contrast, a contract is ambiguous if the intent of the parties is not clear and certain from the language of the contract itself . . . [A]ny ambiguity in a contract must emanate from the language used by the parties . . . If the language of the contract is susceptible to more than one reasonable interpretation, the contract is ambiguous." (Internal quotation marks omitted.) Cantonbury Heights Condominium Ass'n., Inc. v. Local Land Development, LLC, 273 Conn. 724, 735, 873 A.2d 898 (2005).
Since the particular "your work" exclusion at issue here, common to most commercial general liability policies, has not been addressed by Connecticut courts, this court will look for guidance to other jurisdictions. Weldy v. Northbrook Condominium Ass'n., Inc., 279 Conn. 728, 737, 904 A.2d 188 (2006). While, as the plaintiff points out, some courts have found identical "your work" exclusions to be ambiguous; e.g., Pekin Ins. Co. v. Miller, 367 Ill.App.3d 263 (2006); the majority have held the exclusion to be unambiguous; e.g., Miller v. Allstate Ins. Cos., 896 So.2d 499 (Ala.Civ.App. 2004); Employers Mutual Casualty Co. v. Pires, 723 A.2d 295 (R.I. 1999); Alverson v. Northwestern National Casualty Co., 1997 S.D. 9, 559 N.W.2d 234 (1997); Lusalon, Inc. v. Hartford Accident and Indemnity Co., 400 Mass. 767, 511 N.E.2d 595 (1987). The majority view is persuasive because the exclusion is straightforward, and its plain and ordinary meaning is readily apparent: the exclusion applies to any property a party contracted to perform work on. Therefore, the next inquiry is whether the exclusion applies to the alleged conduct at issue.
The court notes that, while it may be difficult to apply the provision to a given set of factual circumstances — such as, for example, determining whether certain work was performed "incidental to" a contract or not — this does not render the provision itself ambiguous; rather, it requires a separate factual determination distinct from determining what the provision means. The language of the provision admits of only a single reasonable interpretation; therefore, it is unambiguous.
Employers Mutual Ins. Co. v. Pires, supra, 723 A.2d 295, involves a similar factual situation. In Pires, the defendant subcontracted to paint certain doors and window frames on a new home and allegedly damaged the window panes when he sanded the frames before painting. The plaintiff, an insurance company that issued him a commercial general liability policy, sought a declaratory judgment that the defendant's conduct fell within a "your work" exclusion identical to the one in the present case. The court held that, while the exclusion was unambiguous, it was unclear on the basis of the facts adduced whether it applied to the conduct at issue: "If [the defendant contractor] performed work on the window panes in connection with painting the window frames (for example, by taping the surface of the panes during the prepainting process, or by cleaning and/or scraping the panes before or after applying paint to the frames) and he negligently damaged the panes as part of such a preparation or cleanup operation, then the damage would fall within the exclusion for incorrectly performed work. If, on the other hand, [the contractor] did not intentionally perform work on the window panes in connection with painting the window frames, but only damaged them accidentally when he was performing work on the frames, then such damage would not fall within the policy's exclusion for `incorrectly performed' work on such property." Id., 299.
In Biltmore Construction Co. v. Owners Ins. Co., 842 So.2d 947 (Fla.App. 2003), the plaintiff construction contractor had been sued for damage to the floors and property inside the building it had constructed. The plaintiff then brought suit against its insurance company to recover the costs of its defense. The court, considering the application of an identical "your work" exclusion, held for the plaintiff noting that "the allegation that there was damage due to severe water infiltration could obviously include damage to property other than the improperly constructed windows and exterior walls, as it could include damage to carpeting and drywall." Id., 949. Since the plaintiff had only performed work on the exterior of the building, damage due to his negligence caused to other portions of the property — even if because of faulty workmanship — was not subject to the "your work" exclusion. Similarly, the court in Auto-Owners Ins. Co. v. Home Pride Companies, Inc., 268 Neb. 528, 684 N.W.2d 571 (2004), held that damage to the subject building's underlying roof structure caused by a contractor's negligent reshingling of the roof did not fall within a similar "your work" exclusion; the property that was damaged and had to be replaced was not the shingles but the roof structure itself. Id., 538.
Although the circumstances in Biltmore differed slightly in that the damage occurred after the contractor had completed its work, the court did not base its decision exclusively on the "completed product" exception contained therein and reasoned simply that, since the interior of the building and its furnishings were not the portion of the property worked on, the "your work" exclusion did not apply.
In the present case, the alleged damage did not occur to the portion of the building Connecticut Building was working on — the steel structure — but to the surrounding windowpanes. The plaintiff made two separate allegations of damage to the windowpanes: from the actions of Connecticut Building while working on the steel structure pursuant to the contract, and from the subsequent process of removing paint that had become caked on the panes. The defendant argues that the paint removal was incidental to the contract and, therefore, became part of "Connecticut Building's work," citing Lusalon, Inc. v. Hartford Accident Indemnity Co., supra, 400 Mass. 767, and Alverson v. Northwestern National Casualty Co., supra, 559 N.W.2d 234, in support. In Lusalon, the plaintiff contractor was to install concrete masonry block in connection with the construction of a building. In the process, the contractor splattered mortar on an adjacent metal door and window frames; while cleaning the mortar, it neglected to remove the muriatic acid used which caused the paint on the door and window frames to peel. Lusalon, Inc. v. Hartford Accident and Indemnity Co., supra, 400 Mass. 769. In Alverson, the contractor performed masonry veneer work on the house and fireplace, and left a residue of dirt and mortar on the house and windows. In cleaning it off, the contractor allowed sand particles in the mortar to permanently scratch the windows. Alverson v. Northwestern National Casualty Co., supra, 559 N.W.2d 234. Both courts held the "your work" exclusion applicable. Tellingly, the Alverson court expressly noted that "[t]he key fact is that the windows were not damaged before the cleaning and could have been cleaned without being damaged. Alverson cleaned some of the windows himself and they were neither scratched nor damaged. His employees cleaned the other windows and scratched and damaged them." Id., 236.
Both Lusalon and Alverson are distinguishable from the present case in that the complained-of damage in the former occurred as the result of the active efforts of the insured contractors to remove residual materials from property not expressly contemplated by the respective contracts. The present plaintiff, however, also alleges that Connecticut Building caused damage to the windows during the performance of the contract. Such a situation is more analogous to the one contemplated in Employers Mutual Ins. Co. v. Pires, supra, 723 A.2d 295, where the court determined that damage to windowpanes while working on the frames would fall outside the exclusion, and the policy would provide coverage.
The exact cause and extent of the damage allegedly resulting from Connecticut Building's work on the steel portion are disputed material facts that must be reconciled by a trier of fact before this court can hold as a matter of law that the work exclusion applies in this case.
The defendant's second argument is essentially a modified version of their first, since it invokes the policy considerations behind courts' interpretations of the "your work" exclusion. Providing coverage for the type of damage alleged, the defendant claims, would amount to requiring insurers to be guarantors for the work performed by an insured, a result denounced by the majority of jurisdictions. "A Commercial general liability policy does not insure the insured's work itself; rather, it insures consequential damages that stem from that work." Acuity v. Burd Smith Construction, Inc., 721 N.W.2d 33 (N.D. 2006); see also Weedo v. Stone-E-Brick, Inc., 81 N.J. 233, 405 A.2d 788 (1979); Times Fiber Communications, Inc. v. Travelers Indemnity Co. of Illinois, Superior Court, judicial district of Stamford-Norwalk at Stamford, complex litigation docket, Docket No. X05 CV 03 0196619 (February 2, 2005, Rogers, J.) [ 38 Conn. L. Rptr. 642].
These cases are inapposite to the present situation, however, as it is not Connecticut Building's work product that caused the damage to the windowpanes but its negligence in performing that work. The "stucco" example; see Weedo v. Stone-E-Brick, Inc., supra, 81 N.J. 240; is relevant to situations where the contractor's product itself in some way causes damage to person or property because of its faulty construction or installation. Importantly, both the Weedo and Times Fiber courts were considering whether the damages alleged fell under a policy exclusion for "property damage to work performed by or on behalf of the named insured arising out of the work or any portion thereof, or out of materials, parts or equipment furnished in connection therewith"; Weedo v. Stone-E-Brick, Inc., supra, 81 N.J. 241; a provision more similar to that referenced in the defendant's second special defense, not the "your work" exclusion that is the basis for the present motion. Therefore, it is not relevant to the present determination.
Since there are genuine issues of material fact as to how the damage to the windows arose, the defendant has failed to meet its burden of demonstrating the nonexistence of any material facts. As such, summary judgment is inappropriate, and the defendant's Motion for Summary Judgment is denied.